Renting in Australia: Breaking Your Lease Early
Life can quickly change and, while not ideal, this sometimes involves moving house before we expect to. If you're renting a home in Australia and you’ve signed a fixed-term lease agreement, it’s generally assumed that you will stay on the property for the specified term. It’s best to avoid terminating a rental agreement before it ends, as this can be both a headache and costly for the tenant, but if you absolutely need to break your lease early, keep reading below to find out how to do it as easily as possible.
Can I break my lease early?
Sometimes, a tenant needs to break their lease early. While this isn’t ideal nor recommended, as Australia tends to lean heavily in favour of the landlord/property manager, there are occasions when it can’t be avoided. If you need to break your residential tenancy agreement early, it’s important to be as cooperative and open with your landlord as possible and avoid leaving (to whatever extent possible) on bad terms.
If you have a periodic or month-to-month rental agreement, there is no fixed term to the lease. This means you are free to move out of the property after giving one month’s notice without a penalty fee, at any time.
There is no one-size-fits-all answer to breaking a tenancy early, and depending on your reason for breaking the lease early, the state you live in, type of tenancy agreement you have, and the agreement you and your landlord come to, the steps you will need to take and costs associated with it will differ. If you do need to break your lease early, it’s recommended to reach out to a tenants’ union to learn more about your rights as a tenant in your state or territory.
Legal reasons for terminating your tenancy early
Each Australian state or territory has its own rules and exceptions when it comes to legally terminating a tenancy agreement early, so it’s always best to consult your state’s housing authority for specific circumstances. However, there are some legal reasons you might be able to leave your tenancy early without needing to pay additional costs.
Ending a lease due to undue hardship
Undue or excessive hardship often means financial or health issues that prevent you, the tenant, from paying the remainder of your lease and/or remaining as a tenant on the property. The exact definition of undue or excessive hardship differs by state or territory, and you might still be ordered to pay compensation following the termination of the agreement. However, if you’re experiencing hardship and need to terminate your lease early, you will need to submit an urgent application to your state or territory’s tribunal.
Breach of contract by the landlord
If your landlord is repeatedly breaching the terms of your tenancy agreement, you can usually apply to have the agreement terminated early without penalty. Keep in mind that your landlord will probably need to have breached the contract several times before you’ll be allowed to legally terminate the lease, but breaches of contract can include your landlord not fixing a fault on the property (see below: Uninhabitable premises) or not respecting your right to privacy and/or entering the premise without notice.
If the premises are not up to minimum standards prior to moving in, or if the property becomes unlivable, you can usually terminate your residential tenancy agreement early. A property is generally considered unlivable if it is dangerous or a hazard to your health, such as poor drainage, defective wiring, or bad ventilation. Depending on the issue, you will need to submit a repair notice and give your landlord time to fix or repair the problem.
How do I terminate my lease early?
Read up on your rights as a tenant, and maybe reach out to your local Tenants’ Union for advice if you’re unsure about how to proceed with terminating your lease early. Even if you are sure about how to terminate your lease early, arming yourself with knowledge on tenants’ rights in your state can keep the cost of breaking your lease down.
Find out if you have legal cause to terminate your lease early and follow the necessary steps to apply for early termination. This might include applying for early termination through your state or territory’s tribunal, and writing a notice of early termination to your landlord. Depending on the legal cause and the state you live in, the minimum days’ notice you need to give before moving out will differ.
If you don’t have legal cause to break your lease, read over the signed tenancy agreement and look for anything it might say about early termination. This should spell out what you can and cannot do when it comes to terminating your lease, such as subletting or early release, and any costs you might be held responsible for like advertising or letting fees.
Give notice if you don’t, or can’t, apply for early termination through a tribunal. This is known as a Notice to Terminate a Tenancy Agreement which outlines your notice to terminate the agreement by a specific date. It should include your name and address, the date of writing, your landlord’s name and address, the number of days notice and date you’re moving out, and be signed by you.
Cover the costs of terminating the lease early. This might include rent up until a new tenant moves in, the costs of advertising the property, letting fees, or break fees. You might be able to assist your landlord with finding a new tenant, or finding one to sublet from you (depending on the agreement you and your landlord come to), which might reduce the costs that come with breaking the lease early.
The cost of breaking a lease early
The cost of breaking a lease early depends on the state or territory of the property, type of lease, and how long you might have left on your tenancy. Potential costs associated with terminating a lease early may include:
Break fees: This is usually equivalent to X number of weeks’ rent and can vary depending on the agreement
Lost rent: The rent your landlord would lose if you moved out before the end of the agreement. You can usually negotiate to only pay rent up until a new tenant moves in.
Re-letting and advertising fees: The costs associated with putting the rental property back on the market.
If you need to pay lost rent, re-letting, and advertising fees, make sure to get written agreements on the amount you will need to pay, and keep record of the advertisements your landlord puts up. This will ensure your landlord is making a reasonable effort to get the new vacancy filled as quickly as possible.
Breaking a lease in NSW
If you’re breaking a lease in New South Wales, the type of lease you signed and when it was signed will affect what you might need to pay if you terminate your lease early. Below, you will find an outline of the costs associated with terminating your tenancy agreement early in NSW.
|If your lease is...||You will need to pay...|
|After 23 March, 2020
For agreements of three years or less
|Mandatory break fees may apply and vary based on the stage of the agreement:
|After 23 March, 2020
For agreements of more than three years
|The tenant and agent/landlord may negotiate on an agreed upon amount of compensation. If no agreement can be made, a landlord may seek compensation by applying to the NSW tribunal.|
|After 23 March, 2020
Optional break fee included in agreement
|If the break fee clause is included in the tenancy agreement:
|After 23 March, 2020
Optional break fee not included in agreement
|If the break fee clause is not included in the tenancy agreement: The tenant and agent/landlord may negotiate on an agreed upon amount of compensation. If no agreement can be made, a landlord may seek compensation by applying to the NSW tribunal.|
Breaking a lease in ACT
If you’re breaking your tenancy agreement early in the ACT, how much you need to pay depends on the following conditions:
- How long you have left on your lease
- The type of lease agreement
- If the landlord finds a new tenant within a defined period of time after you (the tenant) ends the lease
The cost of breaking a tenancy agreement is outlined below. With the default break fee, which is how much you will need to pay, plus the maximum defined cost, which is the maximum amount you can be charged for the reasonable costs of re-letting and advertising the property until the vacancy is filled. If someone fills your vacancy before the defined period (six weeks for a tenancy less than halfway through the lease or four weeks for a tenancy more than halfway through the lease) the new tenant will assume the rest of the default break fee cost as the start of their rent.
|Default break fee
(Agreements for three years or less)
|Maximum defined cost
(If tenancy is filled within defined period)
|Tenancy is less than halfway through||6 weeks’ rent||1 week rent|
|Tenancy is more than halfway through||4 weeks’ rent||Two-thirds of one weeks’ rent|
Ending a tenancy in VIC
There is no specific “break fee” tenants need to pay when ending a lease early in Victoria. However, landlords can request certain costs be covered by the tenant leaving. This includes:
Lost rent: VCAT will be the one to decide on how much rent the tenant needs to pay in compensation when breaking a tenancy early. However, if the landlord rents the property to someone else, then the tenant does not need to pay after the apartment has been re-let.
Advertising costs: The tenant may need to cover the cost of advertising the property to look for a new renter. The amount of advertising costs must be deemed what most people would think is “reasonable and fair” and if the tenant and landlord cannot agree on what is reasonable and fair, they can apply to VCAT to make a decision.
Re-letting fees: A tenant who has broken their tenancy agreement might need to pay re-letting fees, or the costs associated with a real estate agent putting the property back on the market. This is usually proportional to the percent of time left on the lease.
If you’re a tenant who broke their agreement early in Victoria, you will not need to pay:
An additional penalty for breaking the agreement
Rent once the new tenant is on the property
Advertising fees if the property was not advertised
Re-letting fees if the property is rented directly through the owner with no agency
Costs to break a lease QLD
There is no defined break lease fee in Queensland, but any termination without legal grounds will probably come with compensation to the landlord. This cost includes losses and expenses associated with the termination of the lease, such as advertising costs, re-letting fees, or loss of rent. This compensation needs to be discussed between the landlord and tenant, and can include how the rent bond is paid out.
Cost of breaking a lease in SA
If a tenant terminates their tenancy agreement early in South Australia, they are liable to pay for any costs associated with the loss of the tenancy. This includes re-letting fees, lost rent, and advertising costs. However, the landlord can only claim these fees if they try to relet the property as soon as possible, also known as “mitigating” the loss. This includes the landlord:
- Is advertising the property appropriately
- Has put the appropriate rent cost and is reviewing the rent regularly
- Is showing the property to prospective tenants
- Is not raising the rent, thus delaying the property being leased
There are specific formulas set out for the fees associated with advertising and re-letting. However, the formula does not apply if:
- The tenancy is ended within the first quarter of the lease term. The full costs can be claimed.
- You (the tenant) continue to pay rent until the end of the fixed term lease, as the lease obligations are met.
|Advertising cost||Advertising cost x number of weeks left on the agreement / divided by ¾ of the whole tenancy term|
|Reletting fee||Agent letting fee (including GTS) x number of weeks left on tenancy agreement / divided by ¾ of the whole tenancy term.|
The cost of ending a tenancy early WA
If you don’t have a just cause for breaking your tenancy early in Western Australia, you might be liable to pay lost rent, maintenance expenses, and/or any other reasonable costs. Even if your tenancy agreement ends, you still need to have 30-days written notice before terminating your tenancy to avoid paying other costs.
The cost of breaking a lease in Tasmania
If you break your rental agreement in Tasmania without proper cause, you might need to pay for any costs associated with finding a new tenant, as well as rent until either a new lease starts or until the end of the current lease date, whichever comes first. During this time, the landlord will need to make reasonable attempts to find a new tenant as quickly as possible.
Breaking a lease in NT
If you break your lease early in the Northern Territory you are liable to pay the loss of rent for the remaining time on your lease, or until the property is relet, whichever comes first. In addition, you might also need to pay the fees for an estate agent to re-let the property, if you break your lease early. A landlord might keep your rental bond, to cover the costs associated with finding another tenant and the loss of rent. If they claim more than the rental bond is worth, they might seek additional compensation through the Northern Territory Civil and Administrative Tribunal.